Miles to cover

India is on the cusp of a digital revolution in the banking sector. With over 260 million people and 50 million merchants on the unified payment interface (UPI), we have already created the infrastructure and the ecosystem for scaling up to the next level. In this context, setting up of 75 Digital Business Units (DBUs) becomes a game changer, as it aims to not only bring digitisation to the grassroots level but also educate people on how to use it to their advantage.

One billion, one nation

The target of reaching one billion transactions per day in the next five years doesn't look like a steep task, but to achieve that, one has to go beyond the techno-savvy and the privileged. The DBUs look to address some of these concerns, as they are also supposed to educate customers on the digital journey and cyber security awareness.

As per a report by consulting firm Deloitte, there are as many as 1.2 billion mobile (750 million smartphone) users in the country. If we want to achieve the one-billion target, we need to get Bharat on board. This can be achieved by establishing a Digi Desk in all the lead district offices; a prototype of the DBU, which will be less costly in comparison to a full-fledged unit. In all the 53,000 rural bank branches, we can also have a Digi Desk managed by a bank staff member, which would solely focus on digital awareness and education. A special thrust can be given to the onboarding of customers from identified sectors like retail, MSME, and other schematic loans.

The next step will be to channel our Nari Shakti. There are over 76 lakh self-help groups (SHGs) under the Deendayal Antyodaya Yojana National Rural Livelihood Mission (DAY-NRLM), one of the vibrant schemes with a good track record. We have over 50,000 BC Sakhi to coordinate and guide these SHGs, at least one in every Gram Panchayat. Their services can be sought by incentivising them in some way so as to promote digitisation among the group members. This alone will bring some 10 crore women under the digital footprint.

Usurp king cash...

Considering the fact that we started our digital journey in mission mode only seven years ago, we have undoubtedly made phenomenal progress. After a few hundred crores in UPI transactions in 2016, we are all set to cross the 100 trillion mark this financial year. But cash in circulation continues to increase; it stood at an all-time high of Rs 31 trillion as of March 2022, which is almost double the amount at the time of demonetisation. This trend can only be reversed if we incentivise digital transactions. While the government has explicitly stated that UPI is a digital public good with immense convenience for the public and productivity gains for the economy, and there is no consideration to levy any charges for UPI services, the concerns of the service providers for cost recovery need to be looked at.

The regulator and the industry could explore a parallel structure where the users make some payments towards support services and maintenance for certain riders. This will help in setting up more facilitation centres all over the country and in providing adequate support service for users. We are a country of 638,000 villages, with 65 per cent of our population living there.

So, digitisation can only happen in a big way if we extend these services at the bottom of the pyramid and also find a model that is beneficial to the whole ecosystem.

The writer is a senior advisor with the Indian Banks' Association and holds a master's degree in economics from JNU. Views expressed are personal